The 75-page report, commissioned by the Pew Center on Global Climate Change, also stresses that rapidly establishing a clear timetable for reducing carbon dioxide emissions from power plants will result in lower costs than waiting to do so and admonishes government officials to promote energy conservation and improve efficiency. Morgan, Apt and Lave write that all electricity companies should be required to spend at least one percent of their value added on research.

"The electricity industry is one of the single most important business sectors of our economy, but this sector also produces the most pollution," said Morgan, head of Carnegie Mellon's Department of Engineering and Public Policy and co-director of the university's Electricity Industry Center. "Electricity generation accounts for 38 percent of all U.S. carbon dioxide emissions, and as demand increases so will the pollution," the report said.

The report also recommends that government officials and the $250 billion electricity industry focus resources on developing "promising technologies that do not require fundamental breakthroughs," like carbon capture from new types of clean coal generators called coal gasification plants.

After 25 years on the blacklist of America's energy sources, coal, for example, is poised to make a comeback, stoked by the demand for affordable electricity and the rising price of other fuels.

At least 94 coal-fired electric power plants—with the capacity to power 62 million American homes—are now planned across 36 states. The report states that construction of these plants would lock the U.S. into a high-carbon future, but that if coal gasification was used for this additional capacity the U.S. would develop low-carbon technology that could be sold to the world.

Low-cost, low-emission, natural gas turbines sprouted like mushrooms in the '90s and their contribution to the nation's generating capacity reached 19 percent. But in the past five years, the cost of natural gas has roughly tripled—from $2 per 1 million British thermal units (BTUs) of heat generated to more than $6 per million BTUs. By contrast, coal costs less than $2 per million BTUs. As a result, utilities have been put in the position of paying more for the gas they burn to make power than they can get for the electricity it produces, according to the report. Gas plants are currently much more expensive to run than coal generators.

The Pew Center on Global Climate Change is funded by the Pew Charitable Trusts and is dedicated to developing a new cooperative and scientific technical approach to solving the global climate debate.